ST CHARLES, MD-It has been one year almost to the day that Federal Capital Partners acquired American Community Properties Trust and then, along with related companies, renamed them The St. Charles Cos. Now, after a period of restructuring along with a $10 million revolving credit line that FCP has secured from Wells Fargo Bank, the 9,100-acre planned community is poised to begin a new wave of development.
The line of credit is one of the largest loans for lot development awarded in the area since the downturn, Lacy Rice, FPC principal tells GlobeSt.com. He expects it will result in $40 to $50 million worth of infrastructure improvements and 1,200 or so residential lots over the next five to six years. “Since we acquired ACPT we have been pushing on some basic land development issues. Now that the restructuring is complete we have been rewarded with one of the first and largest land development credit facilities in the area that will allow us to take St. Charles to the next level,” he says.
The community’s potential is grossly under-realized, Rice continues. “In the 60s there were three 10,000-acre master planned communities begun here: Reston, Columbia and St. Charles. We know how successful the first two have been, now it is St. Charles’ turn.” Even with 45,000 people living in the community, Rice adds, it is far less understood or known. The community’s unrealized potential, however, is what prompted FCP to acquire it. “We have a history of buying under managed, under capitalized properties and repositioning them. This will be our largest endeavor yet.”
St. Charles is entitled for another 11,000 residential units and five million square feet of commercial space. The revolving credit facility, which Rice deems more than adequate, will allow the company to build out the community incrementally, selling about 250 lots per year. Currently it has contracts in place for 190 lots with builders. Demand for these lots is there, he adds, as much of the community’s problems have stemmed from the previous owner’s illiquid position.
The numbers pencil in for FCP for several reasons, he says. The land, originally acquired decades ago, is on a relative basis is very inexpensive. That, plus the existing infrastructure, will allow FCP to deliver the lots for much less than any other company in the DC metro area, Rice maintains. Although he declined to discuss detailed pricing, he did say that the lots are trading to builders between $68,000 for a town home and $85,000 for a single family. “These prices translate into homes in the range of $220,000 for town homes and single family homes in the upper $200s to $350,000 range.” Furthermore, he adds, the company expects to broaden its product range on both ends, with town homes priced under $200,000.
Other recent developments at The St. Charles Cos., include a new 23,000-square foot headquarters for the company at The Wharf at O'Donnell Lake. The new building, located next to the Hilton Garden Inn is expected to be LEED certified next year.
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